One of the largest endowments in the US is making a $4bn investment into Blackstone’s flagship private real estate investment trust, in a move intended to shore up confidence in a $69bn fund that put limits on investor withdrawals last year after suffering heavy redemptions.

The University of California’s endowment, which manages more than $150bn of assets, said on Tuesday that it would make the investment in the Blackstone Real Estate Income Trust, or Breit, at its current net asset value. That means it is taking a large position at the same valuation as the fund’s more than 200,000 existing investors.

However, Blackstone has promised a minimum annual return of 11.25 per cent for six years and is providing a $1bn backstop if the fund does not achieve that target. In exchange, the endowment has agreed to lock up its capital in the fund until 2028, while paying higher overall fees if the vehicle performs well. Other investors do not benefit from the same arrangement.